BULGARIAN ECONOMIC TOP NEWS DIGEST
WEEKLY REPORT (12 - 19 FEBRUARY 2010 )
Sections/headline briefs:
MACROECONOMY:
· Bulgaria will have high-speed railways in three years
· The subsidiaries of the country’s biggest natural gas retailer Overgas are to construct 50 kilometres of pipelines in the country this year
· Russia proposes EUR 2 billion to build Belene NPP against equity
· Agriculture Minister Naydenov: "We will seek to return Bulgarian wines to the russian market"
· Euro funds become Bulgaria's national cause
· BUSINESSEUROPE forecasts 0,3% Bulgaria GDP growth
· Bulgaria’s construction fares worst in EU
· Bulgarian-Algerian economic forum in Sofia
· Die Welt: Bulgaria has fair chances for swift eurozone accession
INVESTMENTS:
· Bulgaria hopes for EUR 3 billion fresh investments
· Bulgaria National Bank: FDIs fall 40% in 2009
· Carrefour will open a store in Plovdiv
· US AES set to build solar power plant near Bulgaria's Silistra
· Russians invest in real estates in Bulgaria
· Bulgarian Academy of Sciences and France to build technology park near Black Sea
COMPANIES:
· Businessmen found Bulgarian Danubian Chamber in Ruse
· New production line to help Schneider Electric Bulgaria treble output through 2012
· Companies receive awards for responsible business
· Bulgaria's Trace wins Trakia Highway tender
THE CRISIS:
· Bulgarian economy shrinks by 5.1% in 2009
· Crisis helps Bulgaria cut in half negative trade balance in 2009
· Recession narrows Bulgaria 2009 current account gap
· Crisis drives 23,000 away from Sofia
· Chemicals maker Polimeri idles production capacities
· Sales volume of soft drinks contract 7% last year
Articles:
MACROECONOMY:
Bulgaria will have high-speed railways in three years
The procedure for the most important infrastructure project in the railways has been launched. This is Sofia-Burgas high-speed section, Transport Minister Alexander Tsvetkov announced in the southern village of Starosel, cited by FOCUS News Agency’s correspondent. The bids were opened on Thursday. Eight companies will be competing in the tender, he added. Tsvetkov hopes the tender will finish within a month and the construction works of the 290-km railway line will begin in the spring. When the project is completed, trains will be able to run at a speed of 160 km/h between the southern cities of Plovdiv and Burgas. Within a month and a half the ministry is to be ready with the other EU-financed stretch – between Sofia and Plovdiv. Sofia-Dragoman railway section is under preparation too. In around three years, when the construction of these sections is expected to come to an end, Bulgaria will have high-speed railways between Sofia and Plovdiv in accordance with all European standards, the transport minister said.
The subsidiaries of the country’s biggest natural gas retailer Overgas are to construct 50 kilometres of pipelines in the country this year
According to information posted on Overgas’ website. Its unit operating in the capital city of Sofia, Sofiagas, is to build a total of 22 km. The length of the gas pipeline network of Overgas in the country exceeds 2,000 km. The company has invested more than BGN 300mn (EUR 153mn). According to the latest data, the pre-tax profit of Overgas shrank by 44% to BGN 12.6mn in 2008 but sales increased by 9% to 278mn cubic metres mostly due to the household segment. Russia’s gas major Gazprom controls 50% of Overgas.
Russia proposes EUR 2 billion to build Belene NPP against equity
Russia’s state-owned nuclear power corporation Rosatom is ready to lend EUR 2 billion for the construction of Bulgaria’s 2,000 MW Belene nuke project over the next two years, energy minister Traycho Traykov said on Friday. on the sidelines of a meeting with Rosatom director general Sergey Kirienko, who arrived in Sofia to discuss loan terms, Traykov said the Bulgarian government believes the Belene project could take off as it has already gobbled up plenty of cash. Russia has been proposing for three years to foot the bill for the project but at first Bulgaria’s former government turned down the proposal. Having failed to secure the financing from banks, the government backpedaled on the rejection and in April 2008 say it would accept the loan. The Belene nuclear power project – which was designed to offset the loss in generating capacity at Bulgaria’s Kozloduy nuclear power facility following the premature closure of two pairs of 440 MW reactors -- will be developed by Russian company AtomStroyExport. Last December, Rosatom proposed to pick up the project’s whole tab, dropping a previous condition to get state guarantees. Traykov said Bulgaria will aim to receive the highest possible economic interest from the project, while retaining the most possible stake. It will offer lucrative financing options to investors, including project finance and guarantee to get shares against the loan. Sources told Dnevnik Rosatom hopes to snap up a 30-35% holding in the new project if it provides the financing. The Bulgarian government plans to lower its stake to 20-30% from 51% as it looks to bring a new investor on board after Germany’s RWE backed from the deal.
Agriculture Minister Naydenov: "We will seek to return Bulgarian wines to the russian market"
Agriculture and Food Minister Miroslav Naydenov will work for the return of Bulgarian wines to the vast Russian market, the press centre of Naydenov's Ministry said. This was the minister's message to Bulgarian wine-makers the minister sent from the village of Ivanovo, Rousse Region, where he took part in the ritual of trimming the vines on the occasion of the Day of St Tryphon, the patron saint of wine and vine."The first thing we are going to do for the purpose of regaining foothold in the Russian market is using maximally the exhibition area Bulgaria is allocated free of charge in Moscow," Naydenov said. Last week Krassimir Koev, Executive Director of the Agency for Wine and Vine, had meetings in Russia's capital in connection with the opening of а Bulgarian pavilion there. He reached an agreement that Bulgaria would have a permanent agricultural pavilion within the premises of the International Exhibition Centre in Moscow. Sectoral exhibitions will be staged in the permanent national pavilion, each one including company stands.Naydenov expressed hope that this year wine-makers would use up in full the amount of grapes. In his words, a total of 182,000 t of grapes were processed in 2009; exports in the same year dropped by 25 per cent from the previous one, down to 66 million litres. Bulgarian vine-growers and wine makers can absorb 112 million euro in EU funds by 2013, he said.
Euro funds become Bulgaria's national cause
What are the main problems and the challenges when applying for projects under EU programmes, 'The Standart' asked Virginia Dimitrova. She is among the leading Bulgarian consultants in the sphere of business development and owner of "Dykon Group". The company has realized over 250 researches and projects in Bulgaria and the Balkan countries financed by EU, Bulgarian government and various international donor organizations.
Positive EU assessments of compliance for several operational programs in Bulgaria were received over the past week. What do we have to do so that the funds reach the final beneficiaries?
The positive assessments are the first step towards successful absorption of EU funds. They also prove that we know how to manage EU funds, on paper at least. However, to put into practice this large set of rules and provisions could be a very difficult process that requires participation of state authorities and beneficiaries alike. Our main goal at present is to achieve a better pace in the absorption of EU funds compared to that of the past three years. This could require a lot of efforts and reforms involving better EU funds management under a particular program, as well as better implementation of that operational program on the part of the state administration.Bulgaria will also gain from such policy - when the beneficiaries successfully absorb the funds, Brussels would report that the administration fulfills its tasks well. The work of Bulgarian administration will be under scrutiny and any negative signals would be thoroughly analyzed.
What would be a tangible term for projects’ approval enabling candidates to fit into the remaining time?
There is a decision the approval to be given in three months. This is a reasonable term.
Under what programmes we could expect a more efficient absorption of funds?
In my opinion, the best results would be achieved under "Transport" and "Regional Development" programs.
BUSINESSEUROPE forecasts 0,3% Bulgaria GDP growth
Economic conditions improved during the second half of 2009 and BUSINESSEUROPE now forecasts EU real GDP growth to reach 1,2% in 2010, following a fall of 4% in 2009.The forecast was made Tuesday by BUSINESSEUROPE in their February 2010 Economic Outlook.The forecast for Bulgaria is a 0,3% increase of the Gross Domestic Product (GDP) and 1,5 consumer price inflation.Despite the projected GDP growth in the EU, unemployment and public indebtedness will continue to rise, reaching this year at EU level an average of 10,2% of the labor force and 80% of GDP respectively.The study provides a business insight into recent and projected economic developments in Europe, based on a survey of BUSINESSEUROPE's member federations, as well as policy messages for a strong and competitive EU economy.Bulgaria's only BUSINESSEUROPE member is the Bulgarian Industrial Association.
Bulgaria’s construction fares worst in EU
Bulgaria’s construction output has contracted deepest within the whole EU in December. With a 33.3% decline, Bulgaria topped the black list followed by Slovakia (-19.7%) on second and Slovenia (-18.8%) on the third spot. Building construction fell by 4% in the eurozone and by 4.9% in the EU, whereas civil construction rose by 1.4% and 5%, respectively. December’s building production increased by 0.5% in both the eurozone and the EU on a monthly basis, which saw drops of 0.8% and 0.4%, respectively.
Bulgarian-Algerian economic forum in Sofia
Energy and construction are among the areas of potential cooperation between Bulgaria and Algeria, Algerian Ambassador in Sofia Ahmed Boutache said at a forum entitled "Economic Climate in Algeria: Business and Investment Opportunities," which opened here on Thursday. The forum is organized by the Algerian Embassy in Bulgaria and the Bulgarian Chamber of Commerce and Industry and is intended to present the opportunities for investment, tourism and business partnerships to representatives of Bulgarian companies, branch associations and other public organizations. The participants are also discussing opportunities for more active involvement of Bulgarian and Algerian companies in the fairs and exhibitions held in the two countries, as well as for the exchange of business visits.Boutache stressed Algeria's capabilities as an oil and gas producer and exporter, Bulgaria's energy demand, as well as his country's ambition to play a geostrategic role in its region.Bulgarian Deputy Economy, Energy and Tourism Minister Ivo Marinov noted that Bulgarian experts could join the extraction and processing of natural gas and oil in Algeria. He said that his Ministry will support each initiative benefiting bilateral trade and economic relations.Bulgarian-Algerian trade totalled 88.1 million US dollars in 2008, of which 81.5 million dollars were exports and 6.6 million dollars imports. Bulgaria persistently tends to run a trade surplus with Algeria. Two-way trade amounted to 39.8 million dollars for January-November 2009, 21.4 per cent up from the like period a year earlier. Imports from Algeria increased by 24.5 per cent, and exports from Bulgaria rose 21.3 per cent. At this point, there are no registered Algerian investments in Bulgaria or Bulgarian investments in Algeria.
Die Welt: Bulgaria has fair chances for swift eurozone accession
Bulgaria stands fair chances of joining the Eurozone soon together with Estonia, Hungary, and Poland, according to an article of the German paper Die Welt.Die Welt points out that despite the tough financial situation in Greece which creates worries for the Eurozone, the accession of the Eastern European states is expected to proceed.“The report of the European Central Bank in May 2010 is most likely going to confirm that the accession of the countries from Central and Eastern Europe remains on the agenda despite the problems with Greece,” Bank of America economist Radoslaw Bodys is quoted as saying.He expects the ECB is going to praise Hungary for its progress, and will give a green light to Estonia’s euro adoption in 2011.In addition, the economist expects that Bulgaria will most likely be invited to join the ERM 2, which is the final step before adopting the euro.The ERM 2 currently includes Denmark and the three Baltic states. However, Denmark has not decided to adopt the euro yet, and Latvia and Lithuania do not meet the Maastricht criteria.The article points out that Bulgaria’s financial indicators are comparable to that of Estonia, and it also has the advantage of its currency being pegged to the euro. Despite its economic difficulties and the IMF bailout aid, Hungary is realizing a shock program that is expected to allow it to meet the Maastricht criteria as early as 2011 or 2012.Die Welt stresses the fact that the last stage before joining the Eurozone usually leads to a boom of the stock market in the respective country – as was the case in Greece in 1999 and Cyprus in 2005. However, it also mentions that private investors should be careful with the stock markets in Budapest, Sofia, Warsaw, or Talin because they are small in size which makes them susceptible to strong fluctuations.
INVESTMENTS:
Bulgaria hopes for EUR 3 billion fresh investments
According to chair of the Bulgarian Investment Agency Stoyan Stalev, foreign investments amounting to 3-3.3 billion euro are a tangible goal in 2010, Focus news agency reported. This is also a prognosis of the cabinet envisioned it the state budget. Whether Bulgaria attains this goal will depend of the financial recovery of the countries that are major source of investment to Bulgaria, especially those of the EU, Stalev commented. In his opinion, Bulgaria should try to draw in more investments from China and Korea as well. For 2009, the expected foreign investment inflow was estimated at 3-3.2 billion euro. However, there are no final implementation results as yet. The crisis has seriously hampered the investment process, Stalev said. Last year the most considerable growth was registered in investments into the renewable energy sources. About 70-80 percent of projects that applied for BIA funding will develop solar and wind farms in Bulgaria.
Bulgaria National Bank: FDIs fall 40% in 2009
The Bulgarian National Bank (BNB) has released its preliminary analysis of Foreign Direct Investment (FDI) for 2009, showing a drop of over 40% in total, and 10% of GDP, compared with 2008.BNB figures show that total FDIs in 2009 amounted to EUR 2,845 M, equal to 8,4% of GDP. The 2008 amounts were EUR 6,549 M, or 19,2% of GDP.Attracted Equity Capital in 2009 amounted to EUR 2,069 M and represented 72,7% of the total FDI inflow, EUR 1 239,9 M less than the amount raised during the same period a year earlier – EUR 3 309 M euro, or 50,5% of the total flow of direct investments.Receipts from investments of non-residents in real estate amounted to EUR 522,9 M, compared to EUR 1,392 M for 2008.For January - December 2009, net capital (the change in the net liabilities of the direct investment enterprise to the direct investor on financial loans, suppliers’ credits and debt securities) was positive, amounting to EUR 459,4 M, compared to EUR 2,705 M for the same period of 2008.Preliminary data on reinvested earnings for 2009 was estimated at EUR 316,3 M, compared to EUR 534,3 M for the same period of 2008.The largest country investments for 2009 were by the Netherlands - 30,9% of total FDIs, Germany -15,2% and the Netherlands Antilles - 7,3%. Russian investment accounted for 4,2% of FDI.By sectoral structure, the largest investments for 2009 were attracted in the financial intermediation sector - EUR 622,6 , real estate deals - EUR 470 M and the repair trade (retail and wholesale) - EUR 393.8 M. Construction accounted for 7,1% of FDI.Preliminary data on direct investment abroad 2009 showed an increase of EUR 134,5 M, compared to an increase of EUR 485,3 M throughout 2008.Equity capital invested abroad in amounted to EUR 109,7 M, as against EUR 509,2 M for the same period of 2008.
Carrefour will open a store in Plovdiv
Europe's largest retailer Carrefour will open a store in the country’s second largest city of Plovdiv and has already rented 10,700 sqm in the shopping centre Galleria Plovdiv (22% of the total area of the centre), according to the investor, European Convergence Development Company PLC (ECDC). Construction works on Galleria Plovdiv are to be completed by the end of the next month. A year ago, Carrefour opened its first unit in the southern Black Sea city of Burgas. It has announced plans to open hypermarkets in Sofia, Varna, Ruse, Stara Zagora, Pleven, and Dobrich as well. Carrefour is the world’s second largest retailer running more than 16,000 stores in 32 countries employing above 490,000 employees.
US AES set to build solar power plant near Bulgaria's Silistra
The US company AES Solar is going to build a 80 MW photovoltaic park in the Bulgarian village of Polkovnik Lambrinovo, near the Danube city of Silistra.The company has requested a 35-year-long license from the Bulgarian State Commission for Energy and Water Regulation and the request will be decided on on Tuesday, according to the Commission's website.The park will be built in 2 stages with a 2012 deadline for the project completion. 64 MW will be launched during the first stage.A preliminary contract for the purchase of the electric power produced by the photovoltaic park has already been signed with the State regulator.The park is the second project of the US company in Bulgaria. The first one was a wind park near the villages of Balgarevo and Poruchik Chunchevo close to the Black Sea town of Kavarna.
Russians invest in real estates in Bulgaria
At the special exhibition in Moscow, Russians showed strong interest in investing in Bulgarian real estates at the Black Sea coast or in the mountain resorts. Interestingly, 90% of Russians prefer buying an estate via Russian brokers than directly from the Bulgarian investors. Averagely Russians allot between 80 and 110 000 euro for a two-bedroom flat in Bulgaria. "A year ago their budget was between 30 and 50 000 euro," said Mariana Daskalova, the Sales Manager of Green Life Property Development.
The company has made by 20% more deals at the exhibition than they did in the beginning of 2009. The clients from Russia are the main players at the recreation real estates market in Bulgaria. The Bulgarian developers offer considerable discounts in their ambition to sell what has already been completed.
Bulgarian Academy of Sciences and France to build technology park near Black Sea
The Bulgarian Academy of Sciences (BAS) will build a technology park for renewable energy sources and solar energy near the town of Pomorie (on the Black Sea) with support from France, BAS President Nikola Subotinov said emerging from a meeting with French Ambassador here Etienne de Poncins. Jointly with the French Commission for Atomic Energy and Alternative Energies, the BAS will construct a solar power plant, Subotinov said, adding that the Pomorie technology park will apply for funding under the EU Operational Programmes. According to Subotinov, the BAS will need 200,000 euro to launch the project. The BAS is planning to construct a total of 4 technology parks - in Sofia, Plovdiv, Pomorie and Varna. Each of them will have its own area of specialization, including nanotechnology, photonics and information technologies, Subotinov explained.He added that in 2010 the BAS and the French National Center for Scientific Research will conclude a new cooperation agreement, after the expiration of the previous one signed 45 years ago.De Poncins pointed out that during all these years, the two institutions have cooperated in a number of areas. He noted that France and Bulgaria cooperate successfully in studying climate change using the BAS Basic Environmental Observatory on Moussala Peak. French and Bulgarian archaeologists also conduct joint excavations in Belogradchik (Northwestern Bulgaria). The Ambassador stressed that his country has maintained close cooperation with the BAS Institute of Microbiology for many years, too.
COMPANIES:
Businessmen found Bulgarian Danubian Chamber in Ruse
A Bulgarian Danubian Chamber has been founded in the Danube city of Ruse in order to protect the interests of Bulgarian businesses dealing with river shipping and trade.This has been announced by Dragomir Kochanov, CEO of Bulgarian River Shipping Jsc, who has been selected to chair the new Chamber.A total of 18 companies whose activities are connected with the Danube have come together to found the Bulgarian Danubian Chamber; 16 of them are headquartered in Ruse.Representatives of seven other companies from around the country have expressed interest in the initiative but have failed to attend the founding meeting.The members of the Bulgarian Danubian Chamber work in the fields of freight and passenger river transport, ship building and ship repairs, river ship supplies.“We have been united by our common woes,” the Chamber Chair Kochanov stated. The Chamber is going to insist on receiving a seat on the consultative council of the Transport Ministry, which currently features no representatives of the river business.Some the major issues of the river companies in Bulgaria have to do with the VAT legislation pertaining to river ship supplies and renting of ships.Another issue is the social security insurance of the sailors on river ships because under the existing legislation the river sailors are not treated as sailors unlike their colleagues at sea.
New production line to help Schneider Electric Bulgaria treble output through 2012
The Bulgarian unit of French engineering group Schneider Electric plans to almost treble its output through 2012 thanks to newly opened 16 million lev ($11.1 million/8.2 million euro) production line, a company official said on Monday. Schneider Electric Bulgaria opened last week a line for the production of circuit breakers at its sole plant in the country located in the second largest city of Plovdiv. The factory's capacity will be gradually raised to 38 million circuit poles a year through 2012, Simeon Simeonov, communications specialst at Schneider Electric Bulgaria, told SeeNews."The new production line will contribute a bigger part of target [...] it will almost treble the [plant's] capacity," Simeonov said. The plant produced 14 million poles last year and it is expected to make 17 million poles this year, 26 million poles in 2011 and reach 38 million poles in 2012. "Productivity at the plant and the number of employees will also increase," said Simeonov. The number of plant employees would rise by 20% in the next two years from current 430. Schneider Electric Bulgaria exports around 85-90% of the Plovdiv plant output and sells the remainder on the domestic market. This ratio will be kept in the future. "The factory in Plovdiv is a global production unit designed to produce for the whole world and therefore the bigger part goes outside the country," Simeonov said. Schneider Electric Bulgaria, set up in 1998, invested 5.6 million euro in building the plant in Plovdiv where it relocated its previous production operations from its first plant in Bulgaria located in Perushtitsa, in the Plovdiv region. The Plovdiv plant was opened in 2007. With the new production line, total investment in the plant reached 47 million levs.
Bulgaria is the only country in southeastern Europe where Schneider Electric (www.schneider-electric.com) has a production unit. Schneider Electric (www.schneider-electric.com) is among the world's largest engineering groups. It offers solutions for electrical distribution, industrial control and automation projects. The group reported 18.3 billion euro in sales in 2008, up 5.8% from the previous year. Its electrical distribution business contributed 57% of total sales in 2008 and automation and control 29%. The group's 2008 net income rose by an annual 6.3% to 1.682 billion euro.
Companies receive awards for responsible business
The Bulgarian Forum of Business Leaders (BFBL) gave out its awards for responsible business at an official ceremony on Tuesday evening. This was the seventh edition of the competition. The winners in the different categories were selected by a 13-member jury comprising representatives from the business circles, politics, science, diplomacy and financial institutions. Below is a list of the winners. Investor in Society: MobilTel mobile operator, for a project called "1788 - Our Response 178 Years after Morse Code Alphabet". Investor in Environment: UniCredit Bulbank, for the project "National Green Programme". Investor in Human Capital and Working Conditions: Siemens Bulgaria, for the initiative to build creches for the children of its employees. Investor in Knowledge: Overgas Inc., for the project Vocational Training. Investor in Marketing defending a particular cause: Procter & Gamble, for the campaign called "Chance for Life, Chance for New Memories" The special award Engage, given out not by the jury but by BFBL, went to Vivacom for its project to support dyslexia patients. The special award for good socially responsible practices of a small or medium-sized enterprise went to the Training Firms Centre for a project "School Academy: Corporate Social Responsibility".
Bulgaria's Trace wins Trakia Highway tender
The contract for construction of a new section of the Trakiya Highway has been won by "Unified Highway Trace", a Bulgarian consortium, according to Bulgarian media reports.The tender on offer was for construction of a 32 km stretch of highway to link the towns of Stara Zagora and Nova Zagora.There has been no confirmation of the award by the tender commission, and the consortium members said they had not been officially informed of the success of their bid.The official procedure currently under way is in the preliminary stages, with the tender committee awaiting confirmation of its decision, probably by the end of this week, according to local media on Wednesday.The Bulgarian alliance had submitted the lowest bid - BGN 137,86 M - in competition with three other approved applicants. Cost had been declared as one of the most important criteria.The low price of the winning bid - approximately one third of the highest figure, and at a lower cost per kilometre than the consortium had received for a similar contract in 2005-2007, has been explained by the consortium’s management as reflecting local transport and material costs - the consortium's operation is based near Stara Zagora.Four other hopeful bidders had their submissions disallowed, for undisclosed reasons. one of the excluded groups, Austrian "Strabag", later filed an official complaint with the Commission for Protection of Competition (CPC), seeking to have the tender award annulled.
THE CRISIS:
Bulgarian economy shrinks by 5.1% in 2009
Bulgaria's economy shrank by a real 6.2 per cent year-on-year in the fourth quarter of 2009 and 5.1 per cent for the full year, the country's National Statistics Institute (NSI) said in a flash estimate on February 12 2010.In absolute terms, the gross domestic product (GDP) in 2009 was 66.2 billion leva, including 17.86 billion leva in the fourth quarter.In 2008, the Bulgarian economy grew by six per cent, buoyed by the momentum accumulated during years of cheaply-available credit. The country officially entered a recession in the first quarter of 2009.The biggest decline was posted by the industry, which shrank by 8.1 per cent for the year, NSI said in a statement. Agriculture declined by 2.9 per cent and the services sector posted an annual drop of 1.5 per cent.Consumption, which was one of the main drivers of economic growth in recent years, was down an annual 5.9 per cent. Investment was down 24.9 per cent.Exports shrank by 10 per cent year-on-year, while imports were down by an annual 21.8 per cent. The trade gap was eight per cent of GDP.NSI's flash estimates, which were launched in 2008, are based on limited data and are subject to revision. The statistics board is scheduled to publish detailed data for 2009 on March 11.
Crisis helps Bulgaria cut in half negative trade balance in 2009
Bulgaria’s negative trade balance declined by almost 50% in 2009 compared to the 2008 levels largely thanks to the effects of the global economic crisis.The county’s negative balance has dropped down to BGN 9,6 B in 2009, according to data provided by the National Statistical Institute.Bulgaria’s total foreign trade declined by 29,3% in 2009 compared to the 2008 levels. It amounted to BGN 55,7 B.Bulgaria’s 2009 export amounted to BGN 23 B (22,5% drop), whereas its import was BGN 32,7 B (33,4% drop).64% of Bulgaria’s export went to fellow EU member states, and 60,2% of its import originated in elsewhere in the EU.Compared to 2008, Bulgaria’s export to the EU declined by 16,9%, and its import from the EU – by 29,3%.Bulgaria’s major non-EU trading partners are Russia and Turkey. Bulgaria’s trade with non-EU countries declined by 36%; its export to non EU states dropped by 31%, and its import – by 39%.
Recession narrows Bulgaria 2009 current account gap
Bulgaria's current account deficit shrank nearly three times last year as the crisis bit and demand on the domestic market dropped, central bank data showed on Monday.The deficit fell to EUR 2.9 B or 8,6% of GDP last year from EUR 8.7 B or 25,4 % of GDP in 2008, the data showed.Foreign direct investment plunged to EUR 2.8 B in 2009 from EUR 6.5 B a year earlier, but covered 97.7% of the current account gap.For December alone, the deficit slowed to EUR 327 M from EUR 966 M a year earlier.
Crisis Drives 23,000 away from Sofia
In a month alone, the economic and financial crisis has forced 23,000 jobless people out of Sofia, trade unions said. “The traffic rate in the city has decreased by over 20,000 cars,” road police added. Many construction workers have come back to the towns of Pernik and Botevgrad as many construction sites in Sofia have been frozen. Managers have undertaken massive layoffs and pay cuts. “Our payments are too low to sustain a living here,” construction workers complain. Representatives of the trade unions have estimated that 700 people lose their job in Sofia everyday. Many small business owners have also been forced to close.
Chemicals maker Polimeri idles production capacities
Bulgaria’s Devnya-based chemical company Polimeri will suspend production for four months, blaming the decision on the economic turmoil, said Nikolay Ivanov, representative of union CITUB at the plant. The announcement sent the company’s stock nose-diving by 13.22% to BGN 1.7 apiece. Ivanov said the company will not shed any jobs while its capacities are idle as many of the workers have already fled, not having been paid since November. Polimeri supervisory board chair Nikolay Banev said the company has some 280 people on the payroll but human resources head Georgi Todorov explained the firm employs no more than 240. Banev said the staff will drop to up to 150 once new investment has been made at the plant. Polimeri said in end-January it has poured over EUR 4 million into a new installation capable of banging out 120,000 tonnes of hydrochloric acid each year. Polimeri investment policy head Todor Tsvetkov said back then that the new technology, supplied by French company Carbon Lorraine, would be deployed and come into operation in end-spring. But yesterday he explained the company is short of cash to finance the upgrade right now. Polimeri currently sells some 40% of the acid generated at the site on the domestic market, with the balance of 60% shipped mostly to Romania, Turkey and Greece.
Sales volume of soft drinks contract 7% last year
The sales of soft drinks on the domestic market declined by 7% to 1.7bn litres last year, according to data of the soft drinks association. The volume of the market increased by 10.8% in 2008 and 18% in 2007 and the companies were expecting 6% decrease this year. The share of soft drinks in all-drinks consumption flattened at 62.4% last year. All soft drink categories faced contractions with the exception of cold drinks and products with less calories. Consumption per capita dropped 6.6% to 226 litres last year after growing by 11% in 2008. The market reached BGN 1.46bn (EUR 746.5mn) in value terms of retail prices, down by 7.7% in a year. The number of soft-drinks producers declined to 268 units as 19 companies exited the market.